Franklin Templeton files for ETFs that reinvest stock dividends into bitcoin exposure
Bitcoin pulled back slightly last week, falling to $62,180 after Wednesday’s Federal Open Market Committee meeting and Kevin Warsh’s first press conference as the new Fed chair.
Similarly, major altcoins such as ether, solana and XRP also saw declines of between 5 to 10% over the week, writes Simon Peters, cryptoasset market analyst at multi-asset investment platform eToro. .
Although the Fed left interest rates unchanged at last Wednesday’s meeting, the updated dot-plot was more hawkish than traders and investors had expected. Nine policymakers who participated in the dot-plot projected at least one interest rate hike this year, while six indicated that multiple hikes could be on the table, prompting traders and investors to reprice risk assets.
Looking ahead to this week, attention remains on the potential path of US interest rates, with PCE inflation data due on Thursday.
If the data shows inflation remains above target and ticking higher, markets may take the Fed’s hawkish dot-plot projections even more seriously.
If the data shows inflation cooling again, traders and investors may view the dot plot as overly pessimistic and may revert to pricing in no rate hikes for this year, particularly now that oil prices have fallen sharply in recent days, and tensions in the Middle East appear to be easing.
BIGGEST MOVERS
$AERO was one of the biggest movers last week, gaining 35% and returning to its recent mid-May high. The rally was driven by the announcement of a major protocol upgrade, which replaces the traditional weekly gauge-voting system with real-time allocation of liquidity incentives, as well as further token buybacks from the Aerodrome Foundation and increased buying from ‘whales’.
Discover more here: https://www.etoro.com/discover/markets/cryptocurrencies/market-movers
EYE-CATCHING STORIES
Franklin Templeton files for ETFs that reinvest stock dividends into bitcoin
Franklin Templeton filed for two ‘Bitcoin DRIP’ ETFs with the US SEC last week. The funds would hold US equities and automatically invest any dividends from their constituent stocks into bitcoin, rather than simply reinvesting them into additional shares or holding them as cash.
The Franklin US Equity Bitcoin DRIP Index ETF would aim to track the 500 largest US companies by market capitalisation, while the Franklin US Innovation Bitcoin DRIP Index ETF will focus on 100 major Nasdaq-listed non-financial companies.
Both ETFs would launch with roughly 95% allocated to equities and 5% to bitcoin-linked investments, such as the spot ETFs. Their bitcoin exposure could then grow over time through the reinvestment mechanism.
Franklin Templeton’s proposed Bitcoin DRIP ETFs are notable because they create a new bridge between traditional equity investing and systematic bitcoin accumulation. They would allow investors to gain broad exposure to US markets while gradually building a bitcoin position through an automated, rules-based process.
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